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National Academy of Sciences Releases Report on Socioeconomic Status in Medicare Payment Programs

July 15, 2016— The National Academies of Sciences, Engineering, and Medicine July 13 released the third in a series of five reports focused on identifying social risk factors affecting the health outcomes of Medicare beneficiaries and how to account for these factors in the Centers for Medicare and Medicaid Services (CMS)’s payment programs. The reports are mandated by Congress as part of Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act, P.L. 113-185).

In the report, the National Academies highlights a number of social risk factors that could be accounted for in the Medicare value-based payment programs and detailed the pros and cons for each option. These factors include dual-eligibility, education, income, race, and neighborhood deprivation. The report also identifies four options for CMS to consider in accounting for these social risk factors in a payment program: stratified public reporting, adjustment of performance measure scores, direct adjustment of payments to providers, and restructuring the payment incentive design.

CMS currently does not adjust Medicare performance programs to account for social risk factors. Providers have long expressed concerns that not accounting for these factors may disproportionately disadvantage those institutions that serve vulnerable patient populations.

Previous National Academies of Sciences reports focused on defining socioeconomic status (SES), identifying SES factors that impact health outcomes, and identifying best practices of high-performing providers and health plans that disproportionately serve disadvantaged patient populations. The next report, expected in October 2016, will recommend new or existing sources of data for the SES factors previously identified. The final report will synthesize all of the reports and will include recommendations.